"Now Sea Island Co., the company that holds all of Jones' properties, is drowning in debt."

There's a fascinating Peter Waldman story in Businessweek on Sea Island and "insider lending."

Even by the relaxed lending standards of the credit boom, the loans for Sea Island Co. were granted with so little fuss that Jones was able to chop several years off of his development plan. As construction began in 2003, he told Cigar Aficionado magazine: "The banks almost pay you to borrow money today."

Now Sea Island Co., the company that holds all of Jones' properties, is drowning in debt. With a $35 million payment due by the end of January, Jones is trying to rid himself of several properties and sell equity in the Cloister resort. Sea Island Co. has fired more than 400 workers, or 20% of its staff, in the past two years.

The decline of Sea Island is a spectacular example of the perils of insider lending, which the U.S. Federal Reserve defines as making loans to bank officers, directors, or major shareholders. While overall commercial lending soared during the credit bubble, insider lending more than kept pace: According to SNL Financial, insider loans as a percentage of all commercial lending rose from 3.1% in 2001 to 3.3% in 2006. At Synovus, Sea Island Co. was the bank's biggest customer.